The European Union has adopted new measures dealing with the structural side of financial supervision, effective 1 January 2011, including the replacement of CESR by the European Securities and Markets Authority (“ESMA”).
As well as continuing the work of CESR, ESMA has new powers, which include:
- the ability to draft technical standards that are legally binding in EU Member States;
- the ability to launch a fast track procedure to ensure consistent application of EU law;
- new powers in resolving disagreements between national authorities;
- additional responsibilities for consumer protection (including the ability to prohibit financial products that threaten financial stability or the orderly functioning of financial markets for a period of three months);
- emergency powers;
- participating in Colleges of Supervisors and on-site inspections;
- monitoring systemic risk of cross border financial institutions;
- a new supervisory role (in particular for credit rating agencies);
- the ability to enter into administrative arrangements with supervisory authorities, international organisations and the administrations of third countries.